STRAYEREDUCATIONINC.

2007 Annual Report O UR H ERITAGE Reprinted from Strayer’s 1912 student catalog

This catalog was written with a view of setting before the men and women of this community some of the advantages of a business education, and of acquainting them with the superior facilities of this school for giving high-grade business training. The courses have been designed and presented to meet the needs of the business office of today. The teachers are men and women who are specialists in their respective subjects. The school rooms have been chosen and equipped with special reference to light, comfort and sanitation, so as to make it an ideal place for study. We ask that the public, in determining which school it shall attend, to consider the facts in connection with this school, as are outlined in this catalog and supplementary literature. It is twenty years old. It has grown steadily since the beginning. It attributes its growth to correct ideals, careful management and successful, enthusiastic, and rapidly increasing alumni. While it is essential to its success that a school should give thorough instruction in the subjects that comprise its courses, yet the school that does only this, falls short of its full mission. The development of those traits of character which make for reliability in business and good citizenship are the peculiar province of the school as well as the home. This school, then, has nothing in common, can have nothing in common, with those so-called business schools offering cheap and superficial courses. Such courses, while inexpensive, and possibly of short duration, cannot result in anything but disappointment in the end. This school, then, stands for high ideals, it courts investigation, welcomes comparison, and stands by its promises. It is a school to which you may attend with the knowledge that you will be in pleasant surroundings, will be accorded fair treatment, and will be given thorough and painstaking instruction. Finally, in presenting this catalog, we want to thank a discerning public for its support, and assure it that we shall endeavor to continue to merit the bountiful confidence it has heretofore placed in us.

Strayer’s Business College circa 1912 O UR B USINESS M ODEL Reprinted from Strayer’s 2001 Letter to Shareholders

trayer Education, Inc. is an education services holding com- Two of the attractive attributes of our business are that it gen- Spany whose primary asset is Strayer University, a 116 year erates significant after-tax free cash flow from operations, and old institution of higher learning focused on educating working that it has a high return on invested capital. The required capital adults. In this letter, when I use the term “Strayer”, I am refer- expenditures to keep our existing assets functioning are roughly ring to the company, as opposed to the University. Strayer equal to our depreciation expenses. The investment capital University, founded in 1892, offers associate, bachelor’s, and required to fund our growth initiatives is not major.This invest- master’s level degree programs in Business Administration, ment capital includes traditional GAAP defined capitalized Accounting, and Computer Information Systems, Education, expenses, as well as increased spending which runs through our Health Services Administration and Public Administration. income statement. We are therefore in the enviable position of Strayer serves students at 55 physical campuses in Maryland, generating almost our entire net income as distributable free the District of Columbia, Virginia, North Carolina, South cash flow, even after investing in our growth. Some of this cash Carolina, Tennessee, Pennsylvania, Georgia, Florida, Delaware, we do distribute back to our shareholders as dividends. The rest Alabama, Kentucky and New Jersey. In addition, Strayer serves of the cash we intend to maintain as liquidity to either fund students in all 50 states and more than 60 foreign countries world- new opportunities, or ultimately return to our shareholders in a wide on the Internet through Strayer University Online. tax efficient manner. We understand that the redeployment of this cash is crucial to creating shareholder value. Strayer’s revenue comes from tuition payments and fees paid by, or on behalf of, Strayer University students. That revenue As both shareholders and management, we are excited by this comes in essentially three forms. Roughly half is paid through business model because we believe that the value of a college federally insured student loans by banks, approximately 20% is degree is rising with the transition to a knowledge economy, and paid directly to Strayer by corporations or institutions on behalf that working adult students in search of an accredited college of their employees who attend Strayer, and the remainder is degree are underserved. We know that Strayer’s academic quality paid by students through their own sources of credit. and convenience make it ideally suited to meet this growing demand. We have the right product, at the right time for a Strayer’s expenses include salaries paid to the faculty at the growing market. Our product, a quality college degree, is valued University who perform the teaching duties, salaries paid to the highly both by students and employers. administrative and admissions staff who manage the campuses and recruit the students, and salaries paid to the corporate staff In 2001, we developed and committed to a new strategic plan, who manage the company’s affairs. Expenses also include lease geared to expanding beyond our current regional focus to serve payments for the campus buildings we lease and depreciation unmet nationwide demand for working adult post-secondary for the campus buildings we own, as well as advertising and education. This plan consists of five elements: marketing costs which serve to attract prospective students to Strayer. Finally, our expenses include supplies; such as books, — Reversing what had been a decline in the enrollment in our paper, pencils, desks, chairs and computers necessary to support core mature campuses. the educational process. Some of the furniture and electronic equipment is capitalized on our balance sheet and the expense — Accelerating the addition of new campuses, by opening is recorded as amortization over the period we expect the two to three per year, particularly beyond our current equipment to last, in accordance with generally accepted geographic scope. accounting principles. — Investing in our online university. The difference between the revenue we take in and the expenses we pay out is used to first pay taxes and is then added to the — Maintaining strong alliances and outreach to the major after-tax income generated by our financial assets (cash and employers of our students. marketable securities on our balance sheet) to make up our reported net income on a fully diluted basis. — Carefully screening opportunities to reinvest capital back into the sector through acquisitions.

1 O UR R ESULTS

Student Enrollment: Fall Quarter Revenues*

50 350

40 280

30 210

20 140

10 70 27,300 $78.2 $92.9 $147.0 $183.2 $220.5 $318.0 23,500 31,400 $116.7 36,100 $263.6 12,000 14,000 16,500 20,100 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07

Operating Income* Net Income*

100 75

80 60

60 45

40 30

20 15 $30.9 $41.2 $52.9 $65.5 $74.9 $21.7 $22.8 $25.8 $33.7 $41.2 $48.1 $52.3 $64.9 $33.5 $79.5 $97.6 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07

Earnings Per Share (diluted)

5.00

4.00

3.00

2.00

1.00 $1.41 $3.61 $2.74 $3.26 $1.55 $1.78 $2.27 $4.47 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 *Dollar amounts are in millions

2 L ETTERTO S HAREHOLDERS R OBERT S.S ILBERMAN Chairman & Chief Executive Officer

Dear Fellow Shareholder,

n this letter I would like to update you on Strayer Education shareholders IEducation’s progress over the past year, as well as share owe Kristin, and her team, with you our plans for 2008. First, however, you will find an enormous debt of grati- on page 1 of this annual report an excerpt from my initial tude for their hard work. letter to shareholders written in 2001. This excerpt describes what our company actually does; how our busi- We serve students in geog- ness model generates both reported net income and dis- raphies in which we do tributable cash flow for our shareholders; and finally, our not operate physical cam- strategy for increasing the value of Strayer Education. puses through our Global Shareholders who are new to Strayer, or those long term online unit. During 2007 shareholders who would like to review our strategy and this unit grew by approxi- business model (neither of which has changed since 2001), mately 24%, increasing to may wish to read the excerpt on page 1 before reading this nearly 4,000 students for the Fall term. Of course, we letter. Factual updates in the excerpt are italicized and make our online courses available to all of our campus reflect our growth since 2001. based students as well. Indeed, by year end over half of our more than 36,000 Strayer University students had taken In 2007, we continued to grow our main operating asset, some, or all, of their classes online. As I have described in Strayer University. For the second consecutive year we suc- previous letters, we view our online academic offerings as cessfully opened eight new campuses, which brought our an integral and fully integrated part of Strayer University. total number of campuses in operation to 51. Importantly, We encourage all of our students to take classes in the 31 of those 51 campuses are less than five years old, and in manner they find most convenient, either at any of our their maximum phase of growth. In 2007, we extended our physical campuses, or online. Our challenge as university Strayer University campus footprint into two new states; administrators is to ensure consistently high standards of New Jersey and Kentucky; and into five new markets: academic quality in all of our classrooms, be they physical Louisville and Lexington, KY; Orlando, FL (two campuses); or virtual. Knoxville, TN; and Cherry Hill, NJ (two campuses). During the year we also took the opportunity to increase our Our investment in new campuses, along with the growth investment in the Atlanta area, opening our fifth campus in of our existing campuses and our Global online unit, gen- that market. erated a nearly 17% increase in Strayer University’s total student enrollment in 2007. To put that number in per- The almost flawless execution of our new campus open- spective, Strayer University had, on average, 4,500 more ings in 2007 were in large measure due to the efforts of our students enrolled in 2007 than in 2006. Those incremental Vice President of Campus Expansion, Kristin Jones, who 4,500 students alone are the size of many small colleges was supported by a small and highly dedicated team. and universities. Kristin’s few, her happy few, her band of brothers (and sisters) spent a great deal of 2007 on the road, living out of Since we expect to continue to expand our University, it is suitcases, helping our newly appointed Campus Deans and incumbent upon us to ensure that our growth does not Directors set up their new facilities. Her team was instru- impede our ability to meet the educational needs of every mental in hiring and training new faculty and staff, as well individual student. The most important means of achieving as welcoming new students to their first classes. Given the that result is through leadership. Therefore, we had the very attractive returns on invested capital we enjoy in pleasure of announcing in 2007, that after a thorough opening new campuses, (by our calculation in excess of search, Strayer University’s Board of Trustees named Dr. 70% on an unlevered basis), our campus expansion efforts Sondra Stallard as our 13th President. Dr. Stallard comes to in 2007 created a significant amount of value. Those of us from the University of Virginia (UVA), where she us fortunate enough during the year to have been Strayer earned her Ph.D. in Education. She has over 30 years of

3 teaching and administrative experience at UVA, including specific and mutually supporting learning outcomes which stints at the undergraduate college, the Curry Graduate a student must master in order to succeed. School of Education, and the Darden Graduate School of Business Administration. She is a recognized expert on the As an open access University, we are committed to sup- education of the working adult and nontraditional student, porting those students who have earned a valid high school and spent the last 10 years as UVA’s Dean of The School degree, but still do not possess the required skills in Math of Continuing and Professional Studies. and English to succeed at the college level. For several years Strayer University has provided free unlimited tutor- That our primary focus at Strayer University is the quality ing, as well as remedial courses in Math and English to help of our academics should come as no surprise to habitual students develop these necessary skills. However, in 2007 readers of this letter. I have written in the past about we took our educational support functions a step further, Strayer University’s three overarching values: educational and required a mandatory pre-enrollment diagnostic test access, academic rigor, and student success. The first two for incoming students to determine their capability of mas- values are somewhat self tering college level work. explanatory. But one might Those students who show ask: what exactly is student deficiencies in Math and success? Quite simply, we English are automatically expect every graduate of placed by their campus deans Strayer University, without into remedial classes. regard to program or degree, to know how to do the fol- I must admit I was unsure lowing: about the potential impact of this initiative on our student • Think Critically: The enrollment, as our remedial graduate must be able classes do not carry college to analyze, evaluate, and level credit. Therefore, stu- construct arguments dents who score below a based on their merits. certain level on the diagnostic test are required to take more • Reason Analytically: courses, and consequently The graduate must be pay more tuition, to com- able to identify, evalu- plete their Bachelor degrees. ate, and solve problems However, I was pleasantly using quantitative and surprised during the year qualitative information. when the implementation of this program seemed to have • Communicate Clearly: no deleterious impact on our The graduate must be new student enrollment able to understand, (which increased nearly 17%), compare, and present ideas in the English language in while it clearly helped improve our overall student satisfac- both oral and written formats. tion and retention rates (which increased approximately 200 basis points). • Behave Ethically: The graduate must be able to make informed professional decisions, grounded in a set of The success of this program reconfirms our strongly held principles. belief that real academic rigor in an open access University is not only possible, but is actually commercially preferable. We call these objectives our University Learning We believe there is a large, underserved market of working Outcomes. Each of our degrees (Masters, Bachelors, and adults seeking a post-secondary education. More importantly, Associates); each of our program areas (Business we also believe that these working adults do not want to be Administration, Computer Science, Economics, Accounting, merely given a college degree. Instead, they want to earn Public Administration, Health Services Administration, their college degrees through real academic achievement. and Education); and indeed each of our courses*, all have

* Our courses are too numerous to mention individually in this letter, but please see our 2008 course catalog, available on the Strayer University Web site www.strayer.edu, for a full listing.

4 In 2007, we were delighted to accept the invitation of high standards of academic quality is a tribute to our Senior Burlington Community College in Willingboro, NJ to co- Vice President of Academic Affairs, Randi Reich Cosentino; locate a Strayer University campus within its facility. We our Provost and Chief Academic Officer, Dr. Joel currently have articulation agreements with more than 100 Nwagbaraocha, and all our Deans and faculty who give so individual community colleges, in which we agree to auto- much of themselves to educate our working adult students. matically matriculate graduates of the community college’s two year Associates program into the third year of Strayer In 2007 we completed the refurbishment of the last three University’s Bachelor program. We also have articulation of the 14 campuses which were in operation when present agreements with five statewide community college systems: management assumed the stewardship of Strayer Virginia, North Carolina, Florida, Kentucky, and Indiana. University in 2001. We have invested over $15 million during the last four years bringing those original campuses We do not think of community colleges as competitors, but up to our standards. As part of its refurbishment, we took rather as important partners in our national expansion the opportunity to sell and lease back our Loudoun, VA strategy. The economic need for working adults to earn a campus facility under very favorable financial terms. We four year Bachelor degree is well established. Regionally now own only five of our 51 campuses, preferring not to accredited, open access, two year community colleges pro- tie up our owners’ capital in real estate under the market vide a crucial opportunity for working adults with little or conditions which have existed from 2001 through 2007. no college credit to first Of course, as generators attempt returning to of surplus capital, we school. Those students would rethink this pref- who earn their associates erence should there be a degree at a community major adjustment to real college and then enroll at estate values in the Strayer University show future. higher than average retention and graduation We also in 2007 expand- rates, and lower than ed our leases at two average academic failure existing campuses in the and financial default Raleigh and Charlotte, rates. We believe two NC markets, as our stu- year community colleges dent enrollment at those can help to attract more campuses had outgrown working adults back into the original lease square post-secondary educa- footage. While we have tion, and then filter out completed our campus those who lack the aptitude or the commitment to com- refurbishment program, I believe our capital expenditures plete a legitimate, academically rigorous, program. The stu- will remain approximately 5% of our revenue over the dents who graduate from community colleges are, quite next several years, as we continue to invest in our Global simply, the students Strayer University can add the most online facilities and the upkeep of our rapidly expanding value to, at the lowest cost; i.e. those students who are right campus network. We firmly believe that investments in our sweet spot as a business. which allow us to serve more students, and make those stu- dents’ academic experiences more fulsome and rewarding, In last year’s letter to shareholders I described the comple- are investments which will generate the highest returns on tion of Strayer University’s academic self study and our our owners’ capital. decision to submit that self study for peer review by our regional accrediting body, the Middle States Commission It is therefore good news that in 2008 we plan to slightly on Higher Education (Middle States). I am pleased to increase our rate of unit expansion to nine campus open- report that in 2007 Middle States not only completed its ings, versus the eight we accomplished in each of the last review of our self study, but also used that self study as the two years. While our preference is to put our owners’ capital basis to reaffirm Strayer University’s accreditation for a full to work as quickly as possible in opening new campus loca- 10 year period (until 2017), without restrictions or condi- tions, we believe we can only ensure consistent academic tions. Middle States’ decision eliminates the need for an quality across a widening geographic network by staffing accreditation review which had been previously scheduled those new campuses with leadership selected exclusively for 2010. Our accreditor’s confidence in Strayer University’s from within our own organization. Therefore, the governing

5 factor on our rate of expansion is neither market opportu- dial Math and English courses, to determine if they are nity, nor financial capital (we enjoy an ample surplus of truly having the positive impact on our students’ learning both); and it is certainly not a concern about the negative outcomes which we expect. short term impact on profitability of opening more new units (we have shown our willingness to ignore this in While one could never accuse us of being particularly the past). Our rate of expansion in the future will only be aggressive developers of new academic programs (we have limited by our success at broadening and deepening our been teaching Business Administration, Accounting, and management development pipeline. Opening nine units on some kind of workplace technology since our founding in a base of 51 (nearly a 20% rate of growth) is no slight 1892), we do occasionally respond to student demand by achievement, but our focus will be to continue to strive to offering new programs which are closely related to our accelerate this important metric. core competencies in professional management. In 2004 we began offering Masters degrees in three new areas: The first four of our 2008 new campuses will be located in Public Administration, Health Services Administration, markets in which we already have an existing Strayer and Education. In 2007, our enrollment in these programs University presence, including a third campus each in the grew to over 2,700 students. More importantly, we have Charlotte, NC; Raleigh, NC; and Orlando, FL markets; now awarded nearly 1,000 Masters degrees in these and a sixth campus in the Atlanta, GA metropolitan area. programs since 2005. The remaining five 2008 campuses will be opened during the second half of the year, most likely in new geographic In 2008 we will begin development of a new undergraduate markets for Strayer University. curricula: Criminal Justice. We are fortunate to already have many faculty members and Deans on our staff who On the academic front, we have a number of important have experience teaching in this area. There seems to be initiatives for 2008. We expect to finish a redesign of our strong student demand for these courses, so we are hopeful MBA degree, which should be available for students we can have a successful start of Criminal Justice classes in matriculating in the Fall term of 2008. We will next turn early 2009. our attention to our Arts and Sciences curricula, which will be due for its triennial review. We intend to pay particular Additionally, in 2008 we are initiating a major effort to attention to the success (or lack thereof) of our new reme- upgrade our online curricula. Under the guidance of our Vice President of Online Academics, Sheena Bhasin, our intent is to combine the best available technology and programming expertise to develop a “next generation online course.” We have already constructed two prototypes for our Economics 100 and Accounting 100 courses, with both being taught online in our Winter 2008 academic term. Based on the feedback from those courses, we plan to begin revamping our entire online curricula over a multi- year period.

Our successes in 2007, as well as the execution of our ambitious plans for 2008, would not be possible without the able leadership of our President and Chief Operating Officer, Karl McDonnell, along with our entire senior man- agement team: Executive Vice President and Chief Financial Officer Mark Brown, Executive Vice President and Chief Administrative Officer Lysa Hlavinka, Senior Vice President and General Counsel Greg Ferenbach, and Senior Vice President for Corporate Communications Sonya Udler. We shareholders are fortunate to have this dedicated group of executives running our business. I, however, am the most fortunate of all shareholders, for not only do I receive a proportionate share in the increase in equity value which this leadership team is creating, I also receive a disproportionate share of the credit for their success.

6 During 2007 our company generated $66 million in owner’s distributable operating cash flow (which I define as that cash generated from the operations of the business which is available to distribute to owners after all necessary investments in the growth and maintenance of the business). This cash flow, of course, compares quite favorably to our reported net income of $65 million, particularly after funding a nearly 20% increase in our capital plant, and shows that our company, executing this business model, continues to be a very efficient generator of cash. In addi- tion to this distributable cash from operations, owners also benefited from three other inflows of cash during the year: the aforementioned Loudoun, VA campus building sale ($6 million), proceeds from executives’ exercise of stock options ($15 million), and the resultant favorable tax treat- ment of those exercises ($13 million).

We used the combined $100 million of investable cash as follows: we paid an annual common dividend of $1.25 per share ($19 million) and we repurchased 260,000 shares of particularly high (it averaged slightly less than 1.0% in our common stock at an average price of $146.15 ($38 2007). However, my response is that we do not control the million). We invested the remaining $43 million in a tax yield, we control the payout ratio (it was a healthy 30% in exempt money market fund which increased our cash, cash 2007); the market, of course, controls the yield by setting equivalents, and marketable securities on our balance sheet the price of the stock. at year end to $171 million (from $128 million the year before), with no debt. Given what the Board of Directors Excess cash above our common dividend we occasionally and I feel is a rather predictable increase in cash flow gen- use to repurchase shares of our stock, but we only do so at eration as we execute our business plan in 2008, we prices we believe to be a significant discount to the intrinsic declared at year end 2007 a special dividend of $2.00 per value of our stock. We limit ourselves this way because share, which was paid in early 2008 and the effect of which when we repurchase shares of our company’s stock, we are will be evident on our March 31, 2008 balance sheet. We increasing the ownership stake in the business of the also increased our annual common dividend for 2008 by remaining shareholders. Of course, our shareholders could 20% to $1.50 per share, and increased our share repurchase accomplish this same result (in a slightly less tax efficient authorization in 2008 to $100 million. manner) if we merely dividended all excess cash, and then let them decide whether to purchase more shares of Over the last several years, the amount of cash we return Strayer in the open market, or diversify by deploying their to owners each year, either through dividends or share capital elsewhere. Since by repurchasing shares we are repurchases, has increased at a faster rate than our growth making that decision for our owners, and taking their in net income or distributable cash flow, even after acceler- option to diversify away, we feel we should only do so at a ating our rate of investment in our organic growth strategy. We significant discount to intrinsic value. expect this condition to continue because we have built up sufficient cash balances to sustain an even faster rate of Now I would be the first to admit that defining intrinsic growth of our business in the future, and consequently our value for any particular security lacks mathematical and need for cash in the business will not grow at the same rate scientific precision. However, as shareholders you can rest as the expansion of the business. assured that your Board of Directors consistently engages in a thorough review of the calculation of Strayer We use three different methods to return truly excess (i.e. Education’s intrinsic value, as well as our definition of “sig- excess to all our growth opportunities in the business) cash nificant discount.” Suffice it to say that, as a Board, we have to owners. We pay a common dividend because we believe tremendous confidence in our business model, and in the that as long as we are committed to this highly cash efficient capability of the management team executing it. and profitable organic expansion strategy, it is appropriate to make a periodic and predictable return of capital to Sometimes, however, as was the case in 2007, this business owners. I am often informed that our dividend yield is not generates so much excess cash that it makes sense to

7 distribute it to owners not just by an increased common Needless to say, we are extremely proud of our track dividend and a healthy share repurchase, but also with a record of over 100 years of providing working adults with special dividend. Hopefully, that will be a problem we will access to high quality, post secondary education. It is what continue to wrestle with in the future. we do, and it is all that we do. Strayer University Alumni include high ranking military officers, government officials, At the beginning of the Winter term 2008, Strayer corporate executives, and leaders of not for profit organi- University welcomed 10 very special students into our zations. On pages 9 and 10 of this annual report you will Masters of Public Administration program. Those students, find comments from a small cross section of our recent who are attending Strayer on full scholarship, all are graduates. While their backgrounds are different, they all members of the Civil Service of the Republic of Liberia. shared a common aspiration to improve their lives through Many of you may remember that our former University education, and the dedication and perseverance to accom- President, Dr. J. Chris Toe, is now the Minister of plish that aspiration at Strayer University. Agriculture of Liberia. It turns out that the former Minister of Finance of that country, John Bestman, also has Finally, on behalf of our Board of Directors and our entire a connection to Strayer University, having earned an MBA management team, I would like to thank you, once again, degree while he was working at the World Bank for the opportunity to be the stewards of your capital. I Headquarters in Washington, DC. Perhaps because she is look forward to seeing all of you at our 2008 annual meet- surrounded by Strayer University graduates and faculty ing of shareholders, to be held at 8:30 am on April 29 at members in her cabinet meetings, Liberia’s President, Dr. our corporate headquarters in Arlington, VA. As always, Ellen Johnson Sirleaf (Africa’s first democratically elected Sonya is available to arrange visits to one of our many near- female head of state) contacted me in 2007 and asked if we by campuses for any of our shareholders who wish to see would consider providing scholarships to 10 of her most the fruits of their investments. Our ability to serve work- promising civil servants each year to earn graduate degrees. ing adults from all walks of life, preparing them to succeed She stated that the key to her plan of returning Liberia to not just academically, but as leaders in their families, their a prosperous country after years of despotic rule was the organizations, their professions, and their communities, is education of the nation’s workforce, starting with her own what ultimately makes being associated with this institution government. We, of course, were delighted to comply with so fulfilling. I urge all of you to visit one of our campuses, her request, and are deeply honored by the confidence she or better yet attend one of our 2008 graduation cere- has placed in us. monies, to share with us that sense of fulfillment. It is a rare enterprise in which your financial investment can do In 2007 Strayer University so well, and simultaneously do so much good. graduated nearly 7,000 stu- dents at seven different commencement ceremonies Very truly yours, during the year. We have reprinted photos of those ceremonies throughout this annual report for those shareholders who were Robert S. Silberman unable to attend any of our Chairman of the Board of Directors, graduations in person. The and Chief Executive Officer University awarded its 2007 Alumnus of the Year Award to General Robert Magnus, the Assistant Commandant of the United States Marine Corps. General Magnus is a distinguished Four Star General, and is the second highest ranking officer in the Marine Corps. He earned his MBA from Strayer University in 1993. General Magnus spoke at one of our commence- ments about how important education had been to his career, and how, were it not for the presence of Strayer University, he would not have been able to complete his graduate degree.

8 O UR A LUMNI

R USSELL S.M OON III Assistant Vice President, Strategic Research Team, Wachovia Corp. N Master of Business Administration 2005

“I am an Internet researcher by trade, so it was important to me to find an adult- focused university that offered online courses. The software and tools I was required to use as an online student have come in extremely handy in my career—and so have the business skills and credibility I acquired. Soon after graduating, I added ‘MBA from Strayer University’ to my online professional networking profile and within a few weeks Wachovia Corp. was calling to recruit me.”

B ETHA O BANGE ,CPA Owner and Founder, Jackson and Associates Tax and Accounting Services N Master of Business Administration 2007

“When I decided to open my own accounting firm, I knew I needed to learn about the management aspects of business. I chose Strayer University because they teach applicable skills based on real-world scenarios. Having other accounting professionals as my classmates was a major benefit—it actually gave me the opportunity to ‘network’ in class. In fact, I opened my business with a fellow Strayer University graduate.”

T OLA M AY Economist, International Monetary Fund Deputy Secretary General, National Bank of Cambodia N Master of Business Administration 2006

“After surviving for four years in a work camp during the Khmer Rouge regime, I helped to rebuild the Cambodian economy and our National Bank. I was then appointed to the International Monetary Fund, where I have been able to expand my knowledge of international banking. My graduate coursework at Strayer University broadened my knowledge of management, leadership and the modern worlds of communication and business. I will be able to take these skills back to my country when I return to the banking sector there.”

9 LYNN M ALCOLM Vice President and Controller, U.S. Postal Service N Associate in Executive Legal Services 1974 N Bachelor of Science in Business Administration 1981 N Master of Business Administration 2004

“Throughout my 34-year career, every time I have needed to increase my knowledge or advance my career I have returned to Strayer University for more education. Strayer’s flexibility really makes a difference for working adults trying to achieve their academic goals. I was able to earn my graduate degree through a combination of online and on-campus programs. That allowed me to maintain my rigorous work schedule and ultimately become controller of USPS with responsibility for a $75 billion budget.”

N OAH L EASK President and CEO, Ishpi Technologies Inc. N Bachelor of Science in Computer Networking 2004

“As the head of a busy federal government contracting firm and the father of three girls, I travel weekly between my home in Charleston, SC, and my clients in Washington, D.C. I chose Strayer University for both my undergraduate and graduate degrees because I don’t have time to handle the administrative tasks that traditional schools require of their students. Strayer University takes care of all the details for me, like processing my G.I. Bill benefits, because Strayer is completely focused on serving the working adult student.”

R EGINA L EIGH Owner, Norwalk, The Furniture Idea N Master of Business Administration 2005

“After 12 years in the securities field, I decided to buy into a franchise and become my own boss. I knew lending institutions would be scrutinizing my credentials, so I decided to go back to school for an MBA. Strayer University was the only university that responded positively to my plan to work full-time while earning my degree. Graduating gave me an incredible sense of accomplishment, because I knew I was finally on my way to fulfilling my entrepreneurial dreams.”

10 PENNSYLVANIA NEW JERSEY Philadelphia (4) Cherry Hill (2) Pittsburgh (2) Wilmington (1) DELAWARE Baltimore (3)

Washington, D.C. (5)

Northern MARYLAND Virginia (4)

Richmond (3)

Louisville (1) VIRGINIA Norfolk (3) Lexington (1)

KENTUCKY Greensboro (1) Raleigh-Durham (3) Knoxville (1) Nashville (1) NORTH CAROLINA

TENNESSEE Charlotte (3)

Greenville (1) Memphis (2) Columbia (1)

SOUTH CAROLINA Atlanta (6)

Birmingham (1) Charleston (1)

GEORGIA

ALABAMA S TRAYER U NIVERSITY CAMPUS L OCATIONS

New states in 2007 FLORIDA

Orlando (3)

Tampa (2)

11 C ORPORATE I NFORMATION

Executive Officers Robert S. Silberman Chairman and Chief Executive Officer Karl McDonnell President and Chief Operating Officer Mark C. Brown Executive Vice President and Chief Financial Officer Lysa A. Hlavinka Executive Vice President and Left to right: Gregory Ferenbach, Randi Reich, Kevin O’Reagan, Dr. Joel Nwagbaraocha, Deborah Keller, Chief Administrative Officer Karl McDonnell, Sonya Udler, Mark Brown, Dr. Sondra Stallard, Lysa Hlavinka Gregory Ferenbach Senior Vice President General Counsel Board of Directors David A. Coulter Robert L. Johnson Managing Director and Senior Chairman and CEO, Sonya G. Udler Robert S. Silberman Advisor, Warburg Pincus LLC RLJ Companies Senior Vice President Chairman and Former Chairman and CEO, Founder, Black Entertainment Corporate Communications Chief Executive Officer Former President and COO, BankAmerica Corporation Television Deborah A. Keller CalEnergy Company, Inc. Former Vice Chairman, Todd A. Milano Vice President Former U.S. Assistant Secretary JP Morgan Chase & Co. President and CEO, Central Human Resources of the Army Gary Gensler Pennsylvania College Kevin P. O’Reagan Charlotte F. Beason, Ed.D. Former U.S. Under Secretary G. Thomas Waite, III Vice President and Chairwoman, Strayer University of the Treasury Treasurer and CFO, Humane Chief Technology Officer Board of Trustees Former Partner, Goldman Sachs Society of the United States Group, LP Former Chairwoman, J. David Wargo Strayer University Officers Commission on Collegiate Robert R. Grusky President, Wargo and Sondra F. Stallard, Ph.D. Nursing Education Founder and Managing Member, Company, Inc. President William E. Brock Hope Capital Management, LLC Principal, New Mountain Former President, RSL Joel O. Nwagbaraocha, Ed.D. Founder and Chairman, Capital, LLC Brock Offices Investments Corporation Former Managing Director, Provost and Former Vice President, Chief Academic Officer Former U.S. Secretary of Labor The Putnam Companies Former U.S. Special Trade Goldman Sachs & Co. Randi S. Reich Representative Senior Vice President Former U.S. Senator, Academic Administration State of Tennessee

Corporate Office: 1100 Wilson Boulevard, Suite 2500, Arlington, VA 22209 (703) 247-2500 Web Sites: Strayer Education, Inc. (www.strayereducation.com), Strayer University (www.strayer.edu) Annual Meeting: The annual meeting of shareholders will be held on Tuesday, April 29, 2008, at 8:30 a.m. at The Twin Towers Conference Center, 1100 Wilson Boulevard, Mall Level, Arlington, VA 22209. Transfer Agent: American Stock Transfer & Trust Company, 6201 15th Avenue, Brooklyn, NY 11219 Stock Listing: Strayer Education, Inc.’s common stock is traded on The NASDAQ Stock Market® under the symbol “STRA” Independent Registered Public Accounting Firm: PricewaterhouseCoopers LLP, 1800 Tysons Boulevard, McLean, VA 22102 Investor Relations: Information may be obtained by contacting the Investor Relations Department at (703) 247-2500.

12 Strayer Education Inc. 1100 Wilson Boulevard Suite 2500 Arlington, Virginia 22209 (703) 247-2500 www.strayereducation.com